Question 1

When an incomplete instrument is completed after it has left the drawer's hands, a holder in due course can:

Accepted Answer

A)  enforce it as completed. 
B)  enforce only the intent of the drawer. 
C)  lose all rights to the instrument. 
D)  not enforce it as completed. 
A)  enforce it as completed. 
B)  enforce only the intent of the drawer. 
C)  lose all rights to the instrument. 
D)  not enforce it as completed.

Question 2

A person who is secondarily liable is like a(n):

Accepted Answer

A)  guarantor on a contract. 
B)  assignor to a contract. 
C)  assignee to a contract. 
D)  drawer of a negotiable instrument. 
A)  guarantor on a contract. 
B)  assignor to a contract. 
C)  assignee to a contract. 
D)  drawer of a negotiable instrument.

Question 3

A person entitled to enforce a negotiable instrument may not discharge the liability of the parties to the instrument by canceling or renouncing it.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following parties is primarily liable on a certified check?

Accepted Answer

A)  The payee who is a certified holder of the check 
B)  The drawer 
C)  The drawee bank that certifies the check 
D)  The cashier 
A)  The payee who is a certified holder of the check 
B)  The drawer 
C)  The drawee bank that certifies the check 
D)  The cashier

Question 5

Themba stole Umi's checkbook and wrote a check for $100 forging Umi's signature. Under these circumstances, _____.

Accepted Answer

A)  Themba, but not Umi, is liable on the check 
B)  Umi, but not Themba, is liable on the check 
C)  both Themba and Umi are liable on the check 
D)  the bank will be liable on the check 
A)  Themba, but not Umi, is liable on the check 
B)  Umi, but not Themba, is liable on the check 
C)  both Themba and Umi are liable on the check 
D)  the bank will be liable on the check

Question 6

Revised Article 3 of the Uniform Commercial Code (UCC) provides that in the event of a breach of a transfer warranty, a beneficiary of the transfer warranties who took the instrument in good faith may recover from the warrantor an amount equal to three times the loss suffered as a result of the breach (i.e., treble damages).

Accepted Answer

A) True 
 B)False

Question 7

An indorser's liability is discharged if the check is not presented within _____ after the indorsement.

Accepted Answer

A)  15 days 
B)  14 days 
C)  30 days 
D)  48 hours 
A)  15 days 
B)  14 days 
C)  30 days 
D)  48 hours

Question 8

Discuss the obligation of the maker of a promissory note.

Accepted Answer

The maker of a promissory note is primar

Question 9

Which of the following is true of the obligations of an acceptor?

Accepted Answer

A)  If the certification or acceptance does not state an amount, then the acceptor is free of all obligations. 
B)  If the certification of a check or other acceptance of a draft states the amount accepted, the obligation of the acceptor is the amount of the instrument at the time a holder in due course takes it. 
C)  If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount. 
D)  If the certification or acceptance does not state an amount, or if the amount of the instrument is subsequently raised, then the obligation of the acceptor is the raised amount. 
A)  If the certification or acceptance does not state an amount, then the acceptor is free of all obligations. 
B)  If the certification of a check or other acceptance of a draft states the amount accepted, the obligation of the acceptor is the amount of the instrument at the time a holder in due course takes it. 
C)  If the certification of a check or other acceptance of a draft states the amount certified or accepted, the obligation of the acceptor is that amount. 
D)  If the certification or acceptance does not state an amount, or if the amount of the instrument is subsequently raised, then the obligation of the acceptor is the raised amount.

Question 10

The acceptor's obligation:

Accepted Answer

A)  extends to a person entitled to enforce the draft. 
B)  does not extend to the drawer. 
C)  extends to an indorser who does not pay the instrument pursuant to the indorser's liability. 
D)  does not extend to the indorser who paid the instrument. 
A)  extends to a person entitled to enforce the draft. 
B)  does not extend to the drawer. 
C)  extends to an indorser who does not pay the instrument pursuant to the indorser's liability. 
D)  does not extend to the indorser who paid the instrument.

Exam 40: Liability of Parties

When an incomplete instrument is completed after it has left the drawer's hands, a holder in due course can:

A person who is secondarily liable is like a(n):

A person entitled to enforce a negotiable instrument may not discharge the liability of the parties to the instrument by canceling or renouncing it.

Which of the following parties is primarily liable on a certified check?

Themba stole Umi's checkbook and wrote a check for $100 forging Umi's signature. Under these circumstances, _____.

An indorser's liability is discharged if the check is not presented within _____ after the indorsement.

Discuss the obligation of the maker of a promissory note.

Which of the following is true of the obligations of an acceptor?

The acceptor's obligation:

Law, Legal Reasoning, and the Legal Profession

Dispute Settlement

Business Ethics and Corporate Social Responsibility

Business and the Constitution

Crimes

Intentional Torts

Negligence and Strict Liability

Licensing and Intellectual Property

The Nature and Origins of Contracts

Creating a Contract: Offers

Creating a Contract: Acceptances

Consideration

Capacity to Contract

Voluntary Consent

Illegality

The Form and Meaning of Contracts

Third Parties Contract Rights

Performance and Remedies

Formation and Terms of Sales Contracts

Warranties and Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

The Agency Relationship-Creation, Duties, and Termination

Liability of Principals and Agents to Third Parties

Employment Laws

Which Form of Business Organization

Partnerships

Formation and Termination of Corporations

Management of the Corporate Business

Financing the Corporation and the Role of the Shareholders

Securities Regulation

Legal Liability of Accountants

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance

Negotiable Instruments

Negotiation and Holder in Due Course

Checks and Electronic Fund Transfers

Introduction to Security

Security Interests in Personal Property

Bankruptcy

The Antitrust Laws

Consumer Protection Laws

Environmental Regulation

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